Let’s talk about the latest pharmacy changes in the Golden State.






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What you will learn

  • Medi-Cal Clawbacks the latest
  • How did the Judge Rule in the court case against DHCS
  • The Role of the California Pharmacists Association
  • Introduction of new legislation to update
  • Get involved!

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This is Michelle Sherman, president of MichRX Pharmacists consulting services, and your host for the conscious pharmacist podcast. We’re a proud member of the pharmacy podcast network and we welcome you to this week’s episode this week. Our episode involves what’s the latest in the golden state? As many of our listeners know there were changes in Medi-Cal, which is the California Medicaid reimbursement in February of 2019 way retroactive clawbacks were going to be instituted all the way back to February of 2017. So the department of health and human services was going to claw back dollars that the pharmacies had already been reimbursed, patients taking care of from now three years ago. And just take the money back. And then in February of 2019, the new Natech methodology for pharmacy reimbursement in the medical program, which is the Medicare fee for service program, was dramatically changed once this native reimbursement was instituted, pharmacies that were billing prescriptions to the medical program.

So a dramatic decrease in their reimbursements. In fact, many reimbursements for specialty drugs such as HIV, drugs, hepatitis C drugs, mental health, drugs the long acting injectables for mental health patients. So not only a decrease in reimbursements, but reimbursements in the negative. This was completely unacceptable. So even though many States, many counties, excuse me, in California, have managed medical or managed Medicaid services. A lot of the specialty services in many counties are carved out. For example, in Los Angeles County, they carve out the entire HIV antiretroviral program. So those pharmacies in LA County or billing the medical program for HIV. And as of February last year, started seeing massive decreases in reimbursements in these prescriptions for their patients. Or while pharmacies were trying desperately to take care of patients, the reimbursements were now in the negatives and what business can survive this massive onslaught, this negative reimbursement is, is unacceptable.

So the California pharmacists association together with a, a massive coalition of pharmacist pharmacy owners and those concerned with this took legal action against the DHCS and brought a lawsuit, a to stop the clawbacks. And the second part of the lawsuit was to change this Maytag reimbursement methodology, which made no sense for patients or pharmacists in, in California. This was so severe that pharmacies have actually already started closing across the state. So the lawsuit was supposed to be heard in, in the fall of last year end of the summer. But instead of an actual hearing in Oakland, the judge decided he was going to do a written ruling, this, this drug on. And the judge had not issued his ruling until DHCS said they are going to re-institute these clawbacks beginning February 10th of this year, February 10th of 2020. The judge then inacted his ruling on February 21st, which was harmful when for pharmacists and pharmacies and specifically for, for patients in California.

And I’ll read you a little bit about that. Also, what I want to let you know is assembly member Jim wood, who has been, who’s a dentist and member of the California assembly has been very proactive in working with the California pharmacist association and crafting pharmacy related bills over the years, many of which deal with PBMs and reigning in the egregious behavior. Well, representative word introduced a bill on February 5th into the California legislature. It’s assembly bill number 2100, which is a bill designed to amend. It’s an ad to a main sections one four one zero 0.5, one four one zero 5.45 and one four one three four of of to repeal section one four one three 3.22 off. And ed sections one four one Oh five four two six and one four one or 5.4 to seven to the welfare and institutions code relating to medical.

So if there’s a lot of bipartisan support in the California Senate and assembly to help patients in California have access to affordable health care and the only way to do that, to have them have access to their specialty meds, HIV meds, hepatitis C meds, mental health drugs, is to ensure that pharmacies don’t go out of business. It’s all very well to have recipients of the medical program have somewhat access to healthcare. But if they don’t have access to prescription drug coverage, we’re certainly not going to be improving the health of Californians. So this bill was introduced, I’ll read you some excerpts of the bill. The bill is in the resources section of, of this show, so you can read the bill as it stands today. Also if you go to ledge info.legislated.ca.gov, you can actually sign up for updates of this bill and actually track it as it goes through the California legislature and hopefully eventually ends up on Gavin governor Gavin Newsome’s desk for for signing later this year.

So this bill will change the medical code to actually incorporate a lot of these native pricing and these, these issues that patients and pharmacists face and is a great step forward in making changes in California for the benefit of patient health and for pharmacists to be able to provide the extraordinary effective care that they need to provide to the citizens of California. So let’s, let’s just go back to this ruling from the judge. In Oakland on February 21st, so on February 21st, the federal district court issued a ruling, partially denied CPH A’s request for issuance of a preliminary injunction. The court rule that the department of healthcare services can continue to implement on a prospective basis only the new Natech pharmacy reimbursement methodology first made effective last year on February 23rd, 2019. So essentially that native reimbursement that started on February 23rd, 2019 can continue for the moment. However, the court refused to authorize the implementation of the new NAIDOC reimbursement methodology on a retrospective basis.

So therefore DHC is cannot go and Institute those clawbacks that they were so eagerly trying to Institute on February 10th of this month and take back money indiscriminately from, from all the pharmacies. As was reported last week at the court’s request, the department agreed to suspend retrospective application of the new methodology by recouping or CLO backing supposed overpayments as an offset against current medical pharmacy payments in the ruling from February 24th 21st the court express concern that the implementation of, of the new NAIDOC methodology on a retrospective basis may cause or exacerbate access concerns for Medicare recipients and may cause irreparable harm to the members of the California pharmacists association. The court has requested for the briefing on the retroactive application of the new methodology that it’s unconstitutional and improper impairment of a provider’s reasonable contract expectations.

So again, back to you know, the California pharmacist association has co-sponsored assembly bill 2100 with Jim ward and the court will be notified and advised that it makes little sense for the department to take any further action, which has the potential of being reversed by legislative action later this year in this current legislative section. Among other things, a be 2100 once in acted would expressly preclude the directors and that’s the director of the HCS. If it’s to apply the new Natech reimbursement methodology for services between April 1st, 2017 through February 22nd, 2019. So more to come on this ruling and the passage of 2100. This is, you know, great things happening in the golden state and how can you help? So to all those pharmacists in California, I sure hope you’re members of the California pharmacist association stomping and coming to legislative sessions up in Sacramento where we meet with legislators and talk about our patients and patient access and how the, the structure of the NAIDOC and, and the clawbacks is irreparably going to home patients and kill patients in California.

So we can discuss issues along with medical reimbursement, this native heck and this issue with bill 2100 as well as make it known about PBMs and how they strangling not only pharmacies and pharmacists but also you read probably home and patients and patient care in the state of California. So before I end this podcast that just, there were a few parts of this 2100 and this amendment to medical pharmacy benefits that, that I just wanted to highlight. In section four, which is one four, one Oh 5.45 in section 13. One part of note is where it reads right now, specialty drug. It means any drug determined by the department pursuant to subdivision F of section 14 one or 5.32 generally require special handling, complex dosing regimens, special nights, self-administration at home by a beneficiary or a care giver or specialized nursing facility services or may include extended patient education, counseling, monitoring or clinical support.

So that’s what specialty drug means in, in this, in this update. Another section I wanted to just elucidate on was section eight, which reads, notwithstanding any other law, if the department implements actual acquisition costs pursuant to close eye or or to or III of sub paragraph a, the department show update actual acquisition costs at least every three months to ensure the actual acquisition cost. Reimbursement methodology for specialty drugs ensures ingredient cost reimbursement sufficient to provide access to cover drugs and notify medical providers at least 30 days before the effective date of any change in an actual acquisition cost. Very important section I the department shall make available a process for providers to seek a change to specific actual acquisition costs when the providers document that the actual acquisition cost does not reflect current available market prices. The department show update a specific actual acquisition costs before notifying providers and provide supplemental ingredient cost reimbursement for specialty drugs.

Very important. This is how we’re going to get past specialty pharmacies providing specialty drugs, HIV, hepatitis C mental health drugs from actually being robbed, if you will, and being able to provide patient care in an absolute deficit. Nobody’s asking for massive profits or anything. All they are asking for is to be reimbursed in a fair way so we can care of our patients. Section J a pharmacy shall not be subject to a prospective or retroactive reduction of claims for reimbursement pursuant to the section as a result of the implementation of actual acquisition cost reimbursement methodology for dates of service on or after April 1st, 2017 through February 22nd, 2019 inclusive for claims for reimbursement that were reimbursed under the reimbursement methodology in effect on March 31st, 2017 except as follows, if the claim was four 44 fraud fraudulently submitted the reimbursement of the claim, he had previously been paid to the pharmacy or pharmacist under the methodology in effect on March 30th, 2017.

All services were improperly rendered by the pharmacy or pharmacist. Makes total sense. So this will be part of this new this new law. Very, very important for pharmacies. For specialty pharmacies. There’s much, much more in this bill. It’s like 10 pages long. I encourage you to read it track it at through the California legislature so you can watch the passage of this bill, the amendments that are put in place as it travels through the assembly, through all the committees. And then through the Senate and hopefully it gets approved and lands on the governor’s desk and it’s something that he will sign. The next part of this Bill’s history will be a hearing in the health committee of the assembly, which will be roundabout March 7th or so. So there’ll be much, much more to come. Very interesting to watch the passage of this bill and how it travels and gets amended through the California legislature.

So again, I cannot stress enough how important it is for pharmacists. If you’re not in California, you must belong to your state associations, to the American pharmacist association. These, these associations are working tirelessly day and night on the ground grassroots efforts and in the legislature, both on state and federal levels to change the way and the face of pharmacy to make sure pharmacists are reimbursed fairly to make sure PBMs are dealt with exactly how they should be dealt with so that they do not compromise the care that we as pharmacists provide to our patients. And we do not put PA, not we as pharmacists, but they do not put patients’ lives at risk. Remember you can be the change. You have to get involved, you have to have your voices heard. Every voice matters. Let your voice be heard, and until next time, be the change.